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Santa Fe New Mexican Calls For Minimum Wage Freeze

Posted by santafechamber on January 16, 2013

Rethinking the minimum wage

The New Mexican
Posted: Saturday, September 01, 2012 – 9/1/12

The likelihood of a majority of business owners agreeing that a high minimum wage — at least compared to minimum wages in the rest of the United States — is a good idea hovers right about zero. Despite business opposition, the city of Santa Fe, for reasons of justice and humanity, decided back in 2003 that it was right to require businesses to pay an hourly wage that is higher than the federal government minimum. The city’s “living wage” is now the highest minimum wage in the country at $10.29, well above the federal standard of $7.25.

To some, the wage is a barrier to business growth, keeping small businesses from expanding and stopping national chains from locating here. There have been unintended consequences as well, including some reluctance by business owners to hire teenagers. After all, why pay a kid 10 bucks an hour when there’s an adult who can do the same job but with more experience and a developed work ethic? The wage makes doing business in Santa Fe too expensive, say opponents. Even more worrisome, say some business owners, is not knowing how high the wage will go. Santa Fe’s wage is tied to the Western Regional Consumer Price Index and adjusts depending on the index. Embarrassingly, Santa Fe officials forgot to figure a new wage in 2011, causing the hourly rate to increase 44 cents this year to catch up. That was a big hit for business to absorb all at once.

Supporters, of course, point to the men and women who are better able to support families because of a decent wage. There are business owners, too, who believe in a living wage and say they thrive when their employees do well.

Some nine years in, we still hear calls to repeal the living wage, or at least to stop and review its effects — both good and bad — as the city goes forward. Reviewing the issue is not a bad idea. After all, it’s been about five years since the city last looked at the ordinance in any comprehensive way. Several issues are worth examining: the hiring barrier’s impact on teens; whether businesses have had to reduce workers’ hours or lay off workers to stay in business; how many workers enjoying the higher wage don’t live in Santa Fe, taking their pay to places like Albuquerque; and whether Santa Fe really is losing out on national businesses.

One option we think the city should discuss is this: Rather than tying wage increases to an automatic index, especially given trying economic times, the council should consider voting on wage increases — taking into account the health of small businesses while doing so. What’s more, we should debate how far ahead of the rest of the country we can afford to remain. Albuquerque’s minimum wage is at $7.50, barely a quarter above the national minimum; the city could vote to go up a dollar come November, but that is no sure thing. Santa Fe, admirably, has put emphasis on paying a decent wage to workers at the bottom. Through it all, the city has maintained a fairly low unemployment rate, something it can brag about. Yet it is clear, if only from anecdotal evidence, that local businesses are paying a price for this decision. To ensure that the living wage is helping those it is designed to help and that small businesses are not suffering, the city of Santa Fe should take wages off automatic pilot.